Australian Government Introduces New Incentive to Bring Big Tech Back to the Table with News Publishers
The Australian federal government has unveiled a new bargaining chip in the ongoing battle to bring big tech companies back to the negotiating table with news publishers. The “news media bargaining incentive” is a levy issued by the Australian Tax Office to digital platforms, with the aim of encouraging platforms to renew or initiate deals with news publishers to pay for news content.
Platforms that refuse to engage in negotiations will still be required to pay the levy, regardless of whether they host news content on their sites. Assistant Treasurer Stephen Jones and Communications Minister Michelle Rowland announced the new incentive at a media conference, suggesting that platforms like Meta and Google could end up with a larger bill if they choose not to enter into agreements.
The incentive is part of the Morrison government’s efforts to strengthen the 2021 news media bargaining code, which gave the federal treasurer the power to designate eligible digital platforms to enter into commercial agreements with news publishers. A review of the code in 2022 showed that the threat of designation prompted Meta and Google to make deals totaling over A$200 million across the media sector.
However, Meta recently announced that it would not renew any of the deals it made with Australian news media companies three years ago, leaving the government with a dilemma. Should they designate platforms and risk a similar outcome to what happened in Canada, where Meta removed all Canadian news content from its platforms in response to government pressure?
The Canadian government’s Online News Act, Bill C-18, aimed to compel Meta and Google to pay for third-party news content on their sites. However, Meta’s response was to block Canadians from accessing and sharing news on its platforms, leading to significant declines in online traffic, audience engagement, and revenue for Canadian news publishers.
In contrast, the Australian government has opted for a business incentive approach with the news media bargaining incentive. The levy applies to digital platforms regardless of whether they host news content, incentivizing platforms to enter into agreements with news publishers. While the incentive looks promising, questions remain about how effective it will be in practice.
The government has yet to address the possibility of digital platforms continuing to withdraw from negotiations with news publishers. A public consultation paper detailing the structure of the incentive will be released in early 2025, giving platforms like Meta time to consider their next move. The outcome of this new approach remains to be seen as the government navigates the complex landscape of digital platforms and news publishers.